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§ 32. should be made. It is important that the signature should follow as closely as practicable the form of the name as given in the bill or special indorsement. The following will probably be found to be in accordance with the best commercial usage :—



Use the christian name or initials as in the bill or special indorsement if there be no mistake in the name as there given and no misspelling, dropping all prefixes and suffixes, such as "Mr." " Mrs." "Miss,"" Messrs.' Hon." "Esq." etc. Where for the purpose of identification, an addition follows, such as "merchant," "M. D." "M. P." "Q. C." or the like, it may be well to add this to the signature. A bill to the order of Mrs. John Smith may be indorsed "Mary Smith wife of John Smith;" or a bill " to the estate of John Jones, or order" by "A. B., executor or administrator late John Jones;" a bill "to the order of the City Treasurer, Toronto" by "A. C., City Treasurer, Toronto;" a bill to the order of "The Canada Gas Co.," by "The Canada Gas Co., per E. F., Manager;" a bill "to the order of John Smith & Co.," if by a partner should be indorsed simply "John Smith & Co." and if by another person authorized by the firm "John Smith & Co., per G. H. Atty." or "per pro. G. H."

Signatures such as the following should be avoided, partly on the ground of ambiguity, and partly on account of the danger of the agent or representative making himself personally liable:-"A. B., agent for C. D.,” “Per proc. E. F., G. H.," "J. K. for the L. M. Co." "J. K. for L. M. & Co." " J. K., for the estate of L. M."

Or ler of in- 3. Where there are two or more indorsements on a bill, each indorsement is deemed to have been made in the order in which it appears on the bill, until the contrary is proved: Imp. Act, s. 32 (5).

Each indorser undertakes to compensate the holder or § 32. subsequent indorser who is compelled to pay the bill: section 55, s-s. 2. As between themselves they may agree that this liability shall not exist or even that it may be reversed; but such an agreement would not affect the bona fide holder of a note who may treat the prior parties as liable in the order in which they stand on the note, although a contrary agreement, of which he was aware when he took it, may exist between the parties: Elder v. Kelly, 8 U. C. Q. B. 240 (1851); McLean v. Garnier, 14 N. S. (2 R. & G.) 432 (1881).

This agreement may be proved by parol: Wordsworth v. McDougall, 8 U. C. C. P. 403 (1859); Day v. Sculthorpe, 11 L. C. R. 269 (1861); Leveille v. Daigle, 2 Dorion 129 (1880); Willett v. Court, 6 L. N. 204 (1883); Scott v. Turnbull, ibid. 397 (1883); Deschamps v. Leger, M. L. R. 3 S. C. 1 (1886); Wilders v. Stevens, 15 M. & W. 208 (1846); Coolidge v. Wiggin, 62 Me. 568 (1873).


4. An indorsement may be made in blank or Special special, may also contain terms making it restric- ment. tive: Imp. Act, s. 32 (6).

For indorsements in blank and special indorsements, see section 34. For restrictive indorsements, see section 35.

of indorse

33. Where a bill purports to be indorsed con- Conditions ditionally, the condition may be disregarded by the ments, payer, and payment to the indorsee is valid, whether the condition has been fulfilled or not. Imp. Act, s. 33.

An absolute indorsement is one by which the indorser binds himself to pay, upon no other condition than the failure of prior parties to do so, and due notice to him of such failure, and protest when required by law. A condi

§ 33. tional indorsement is one by which the indorser annexes some other condition to his liability. Sometimes the condition is precedent and sometimes subsequent. Thus, "pay to A. or order if he lives until he is 21," or "if he is alive when the bill becomes due," is an indorsement upon a condition precedent. "Pay to A. or order, unless before payment I give you notice to the contrary," is upon a condition subsequent. A condition attached to the indorsement does not restrain the negotiability of the bill.

Change in law.

This section alters the law. In England where the acceptor of a bill paid the indorsee who held under a conditional indorsement, the condition not having been fulfilled, he was obliged to pay a second time: Robertson v. Kensington, 4 Taunt. 30 (1811); Savage v. Aldren, 2 Stark 232 (1817). In Quebec the same rule prevailed: "An indorsement may be restrictive, qualified or conditional, and the rights of the holder under such indorsement are regulated accordingly ": C. C. Art. 2288.

The new rule is much more equitable, as it was manifestly unfair to impose, for example, the duty upon an acceptor of determining whether or not a condition that had been placed upon the bill after his acceptance, and by parties of whom he might know nothing, nad been fulfilled. By paying he ran the risk of being compelled to pay a second time; by refusing, his paper would go to protest, and he be exposed to costs.

It is to be observed that the section does not give the holder the right to compel payment if the condition is not fulfilled, it only discharges the person who pays. If the condition is not fulfilled the holder who receives payment may be responsible to the prior indorser who made the conditional indorsement.

A bill of exchange must be unconditional sections 3 and 11, s-s. 2; an acceptance like an indorsement may be conditional section 19, s-s. 2.


34. An indorsement in blank specifies no in- § 34. dorsee, and a bill so indorsed becomes payable to Indorsebearer: Imp. Act, s.. 34 (1).

An indorsement in blank consists simply of the signature of the indorser. When so indorsed it may be negotiated by delivery: section 31, s-s. 2, unless or until the blank indorsement is converted into a special indorsement section 34, s-s. 4.

The rule of this sub-section has long been recognized as law in England: Peacock v. Rhodes, 2 Douglas 633 (1781).

By the old French law indorsements in blank were not recognized: Pothier, Change, No. 38; nor are they now except as "procurations" and not as negotiations of bills, the holder being merely the agent of the indorser: Code de Com. Arts. 137, 138. In Lower Canada the old French law was modified by 17 Geo. 4, c. 2, which allowed notes of bankers, merchants and traders to be indorsed in blank. A tavern keeper's note was held to be within the Act: Patterson v. Welsh, 2 Rev. de Leg. 30 (1819); McRoberts v. Scott, 2 Rev. de Leg. 31 (1821); and it was held that only bankers, merchants and traders could indorse in blank Bank of Montreal v. Langlois, 3 Rev. de Leg. 88 (1847). By 12 Vict. c. 22, s. 1, it was enacted that any bill or note payable to the order of any person might be indorsed in full or in blank, and this was embodied in the Civil Code as Article 2286.


ment in blank.


2. A special indorsement specifies the person to Special inwhom, or to whose order, the bill is to be payable: Imp. Act, s. 34 (2).

A special indorsement or indorsement in full is so called because the indorser not only signs his name but

§34. states in whose favor the indorsement is made. It may be in any of the following forms: "Pay to A. B." which gave the right to negotiate the bill while a bill in that form was not negotiable: Edie v. East India Co., 2 Burr. 1216 (1761); or "Pay A. B. or order;" or "Pay to the order of A. B." which last is equivalent to the preceding, as it enables A. B. to demand payment without indorsing, or to indorse the bill at his option: section 8, s-s. 5. See Soares v. Glyn, 9 Q. B. 24 (1845); Harmer v. Steele, 4 Ex. 15 (1849); Robarts v. Tucker, 16 Q. B. 579 (1851); Law v. Parnell, 7 C. B. N. S. 285 (1859).

Application of

Act to indorsee.

of blank in

A French indorsement must be dated, must declare how value has been given, and give the name of him in whose favor it is made: Code de Com. Art. 137.

3. The provisions of this Act relating to a payee apply, with the necessary modifications, to an indorsee under a special indorsement: Imp. Act, s. 34 (3).

Each indorsement is like a new drawing of the bill; if in blank, it is as if the new drawing were in favor of bearer; if special, as if it were in favor of the indorsee. The chief provisions of the Act made applicable to an indorsee by this clause, are that he must be named or clearly indicated by his office or otherwise, that a bill may be indorsed to two or more indorsees jointly, or to one of two or more, and that the indorsee may either demand payment of the bill himself or again indorse it specially or in blank sections 7 and 8.

Conversion 4. Where a bill has been indorsed in blank, any dorsement holder may convert the blank indorsement into a special indorsement by writing above the indorser's signature a direction to pay the bill to or

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